HUD announced this week several major changes for FHA loans later this year. Some of this items will not go into effect for several months but are worth noting.  Overall, HUD is doing the right thing to keep themselves in business and help consumers be able to purchase homes.

1. Up-front MIP will increase to 2.25%, to be announced in a Mortgagee Letter today; this will go into effect sometime in the spring (NOT effective immediately).

How this effects you: Currently up-front MIP is at 1.75% of the base loan amount. Example, on a $100,000 base loan amount, the amount that is currently added to that amount is $1750.00. This makes the total loan amount that is financed as $101,750.00.  The monthly payment (assuming a 5.50% rate) would be $577.73. Under the new change the new loan amount would be $102,250.00 ($500.00 more added to the loan balance) and the new monthly payment would increase to $580.56 ($2.83 per month more). Not a huge impact on the consumer but worth noting. The benefit is significant to HUD as it allows them to re-capitalize their insurance fund (which is low due to loan losses over the past several years) and continue to insure home loans will minimal down payments which is a good thing.

2. Borrowers with credit scores less than 580 will be required to put down at least 10%; effective early summer.

How this effects you: Although HUD/FHA has never required a minimum credit score, most investors have required minimum credit scores for quite some time.  Most have a minimum of 620 with a few down to 600 and even 580. This is not going to impact much currently as almost no investors/lenders are doing FHA loans with this low of a credit score. However this change might cause some investors/lenders to look at this market segment more seriously because of the significant down payment of 10% possibly opening more opportunities for more borrowers with lower scores and a down payment.

3. Seller contributions to be lowered from 6% to 3%.

How this effects you: This is VERY significant especially lower priced homes.   Currently on a $100,000 the seller is allowed to pay up to $6,000.00 (6.0%) in closing costs and pre-paid items (taxes/insurance). This change will reduce this amount to only $3000.00 (3.0%) in this example.  If your closing costs and pre-paid items happen to be$4,000.00, then you the borrower would have to pay that difference yourself ($1,000.00) due to maximum being now 3.0 percent. This means that your “funds to close” would be $1,000.00 higher than under the prior guidelines. Not a good thing on a cash strapped buyer.    

4. The waiver on anti-flipping requirements is effective 02/01/10, and a preliminary memo was sent out about that on Tuesday.   

How this effects you: This is very good news and means that there will be a better inventory of renovated property properties to chose from for buyers.  Let’s face it, there are allot of properties out there for sale but many of them are in very rough condition or in short sale situations where it is difficult for a first time buyer to either have to deal with renovations or wait for banks to approve the short sale. This new rule removes the “90 Day hold requirement” by sellers so that properties can be resold more quickly after a purchase.  This will help “fix and flip” investors by reducing their hold times on properties and provide more inventory to prospective buyers. One word of caution to buyers, “Beware of properties that were purchased and marked up with little or no renovation being done”. There are specific rules that must be followed in order for these properties to be financed.  Contact your qualified real estate professional for specifics.

As always, feel free to use me as a resource for your specific circumstances.

Andy Jorgensen

Sr. Loan Originator

Guild Mortgage Company

7951 E. Maplewood Ave. Suite 290

Greeenwood Village, CO 80111

www.taxcreditforeveryone.com

Mortgage Originator License #MB100011854

303-753-9135 or 888-333-6944 office

303-753-8747 or 888-999-3594 fax

303-810-1191 cell

In recent months, I have spoken to quite a few people that are concerned with keeping their expenses low in this economic environment. After all, it’s a smart practice in case the economy has a relapse, you lose a job, or you have some unexpected expenses.

For most of us, our biggest expense is our home and more specifically, our mortgage. So it’s not surprising that I have had a lot of conversation with people looking to downsize. Many people have come to the realization that they really could do without all of the extra space. In fact, they say to me, “We don’t really need 4500 square feet. We could do just fine with 2700 or 3000.” What they’re really saying is, “I wouldn’t mind going from a $475,000 dollar home to $350,000 dollar home and saving a thousand dollars a month in mortgage. Again, it’s sound, smart thinking.

Usually, what holds them back from making the move is that they’re concerned about how much money they’ll lose on the sale of their home. Of course, we all know our homes aren’t worth what they used to be, but if you bought smart (location, location, location), maybe, just maybe, you won’t take a huge hit. I also tell potential sellers that you could make up what you lose on your home in the purchase of a new home. After all, someone will be buying your home low and you’ll be buying someone else’s home low. It may be a moot point.

Since this is the first week of the New Year, it’s definitely a good time to start thinking about smart financial planning. The middle of winter is also a good time to find a deal. Don’t wait until the spring when everyone comes off the sidelines and the competition is high. Make a deal in January, February, or March when traffic and competition for premium homes will be less. This also may be a good time to look at buying low on a fixer upper. Spend some sweat equity, do the improvements yourself, and move into a nice home with a nice low mortgage.

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

"It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness; it was the epoch of belief, it was the epoch of incredulity; it was the season of light, it was the season of darkness; it was the spring of hope, it was the winter of despair; we had everything before us, we had nothing before us; we were all going directly to Heaven, we were all going the other way.”

Charles Dickens.

This is easily my favorite quote of all time and it accurately describes how many of us felt during the course of 2009. Some of you may even be thinking, “were there any high points in real estate this year?”

Yes there were, and while I only have limited space I’ll try to recap the top five in each category.

The Lowlights:

·         Clearly, we started the year worse off than anyone imagined. People not only contracted their buying, but they also went into hibernation mode and some agents wondered if they would ever sell a home again.

·         Some price points like the Luxury market saw drops in value in excess of 30 percent in less than a year.

·         Lending has hit a new low. Never has it been so hard to borrow money for the average person. The regulations, guidelines, and qualifications are getting harder every day. At this juncture, I am not convinced that banks are remotely interested in helping Americans get back on their feet.

·         The mortgage industry is now being controlled by a few large banking institutions that have too much power and too much control. This is bad for consumers, bad for competition, and bad for capitalism.

·         The appraisal system has run amuck. It’s in complete disarray and if you wait a week, it will change again. We need stability here soon.

The Highlights:

·         More people were able to buy their first home. The first-time home buyer tax credit worked and stimulated the industry.

·         The fourth quarter looks to have a much stronger close in real estate sales than originally predicted. Improvements in the economy, buyer confidence, low home prices, low interest rates and incentives have brought buyers off the sideline.

·         Today we have a much more qualified buyer than in many years past. People who own homes now or recently bought homes are the ones that can truly afford them.

·         We made great headway in beginning to weed out fraud, deception, cheating, and people looking to take advantage of others.

·         We came out of an election year, banks failing, and unprecedented amount of foreclosures and still the real estate market continued to operate. We got deals done and actually improved the forecast for everyone.

Later this week is the start of 2010. Happy New Year Everyone and let’s pray that we have more to write about in the highlights column.

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

As many of you know from following my columns here in the Denver Post over the last six plus years, I don’t like to talk about business on the week of Christmas. After all, we’ve got 51 weeks in the year to do that. I think that this one week, we can take a break and tackle something more meaningful.

No doubt that this has been one of the hardest years in recent memory for many people including those in the real estate industry. All of us are trying to find our way around a new world of rapidly changing economics. I am reminded of the people who’ve lost their jobs this year, lost their homes, and now maybe spending their first Christmas without a place to call their own. It is my sincere hope and prayer that you’ll find some peace and encouragement this week and in the weeks to come. I am a big believer in positive thinking, finding joy in the little things in life, remembering what matters most, and being thankful for what I have instead of what I don’t have. I think that we need to wake up in 2010, put a smile on our face, declare it’s going to be a great day, week, or year and go get the heavy lifting done. We all know what the problems are so we need to focus hard on the solutions if we are going to turn things around.

Christmas week would not be complete without thanking a few people like the readers of this column. Thank you for your notes, comments, well wishes and shared stories. You inspire me to keep writing and you contribute greatly to the ongoing education process that is real estate. Thank you to the Denver Post for giving me a forum to share opinions, information and knowledge. I appreciate it more than you know. To my fellow colleagues in the business, I always enjoy meeting you, working with you on transactions, and I wish you the very best. When you succeed, we all prosper. To my clients that trust me to sell their homes and purchasing new ones, I am truly grateful that you chose and trusted me in such an important transaction.

Finally, on behalf of my family, it’s with heartfelt sincerity that I wish you a Merry Christmas, Happy Holidays, and a Happy New Year. God bless you in the coming year and take pleasure in this special Holiday week.

Sincerely,

Dan Polimino

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

As a student of marketing, I am constantly fascinated by the data that reveals how people purchases things. There clearly has been a major paradigm shift in the way people find and buy real estate. When I do consulting, I always tell the companies, “Let’s not guess what people want, let’s be sure,” and today, there are more ways than ever to quickly get a pulse on what people want.

The question I have for you today is, “How do you want your real estate?” I always hear professionals in the business debating what works, what gets people’s attentions, and what sells homes. Today, I am taking my own advice and instead of guessing what you want, I am just going to ask. If you are kind enough to send me an email and answer the questions below I promise not to use your name and divulge information. I am just looking for honest answers from you the public and how you prefer to search and buy real estate. Here are the questions:

1. What is your preferred method for finding real estate? Internet, newspaper, realtor, open house, video, TV, radio, email, referral, or some other?
2. If it’s internet, what sites do you shop for homes on the most?
3. Is video now a must for viewing homes online or on your phone?
4. Would you like to be notified about homes for sale via email and text message?
5. Do you look for open houses in the newspaper or online?
6. If you use the newspaper for your real estate needs, what do you want to see the most? Homes for resale, new construction information, market data, rentals, or all the above and why?
7. Do you still like attending an open house or are they a thing of the past?
8. Is your primary focus on getting a deal or getting the right house?
9. What’s your opinion of realtors?
10. What do you dislike about the home buying process?

A big thank you ahead of time to all those who respond to this informal questionnaire; in the end, it will help us deliver real estate exactly the way you want it and use it.

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.CoDreamHouse.com

Buying and selling a home certainly has it seasons. The fact that there are up times and down times in real estate is probably not news to anyone, but what is news is how the calendar and weather affects sales.

Let’s tackle the calendar first. In general, here’s a quick snapshot regarding what happens over 12 months in the buying and selling cycle. Showings usually don’t pick up until the third or fourth week of January. The first two weeks of the month are reserved for people getting over the Holiday hang over. February is a pretty stable month as far as business goes, but historically, not a month that is loaded with transactions. In March, people are getting excited about spring and are thinking about putting their house on the market so business picks up. Buyers are thinking that April is a good month to start looking and they’ll move before the summer gets into full gear. April through July at least in Colorado is the prime selling and buying months. This is when real estate is in full gear, inventory goes up, and transactions go up which translate into people buying homes.

We start to see a slowdown in August as some people are taking one last vacation before the school year starts or they are planning for the school year. Business is slow from the third week of August until the middle of September. Once school is in full swing and parents are in Fall mode, business picks up again from mid-September until the first week of November. Once November hits, people hunker down for the Holidays and real estate comes to a screeching halt. We ring in the New Year with buyers, sellers, and the agents all once again filled with optimism that it is going to be a good year and we start the cycle all over again.

Does it always go exactly like this? Of course not, I have sold more homes in December than in February over my real estate career, but in general, the sales cycle stays pretty close to what is described above.

How does the weather affect sales? We’ll tackle that next week.

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.CoDreamHouse.com

It was great summer for realtor Dan Polimino in Denver, Colorado. See how the local Denver TV news stations covered everything that Dan was doing to sell homes.

Check it out at http://www.coloradodreamhouse.com/about

No question, the internet has changed the face of real estate and everyone seems to be scrambling, trying to figure out how you win the real estate game online. There are social networking blogs, IDX data searches, mobile plug-ins for your phone, national real estate web portals and yes, syndication.

What is syndication? It’s taking a piece of information and placing it on various sources across the internet. In the past, people would make their real estate listing, blogs, and articles available for syndication, but it was based on the premise that someone had to come to find your material and then subscribe. Today, the paradigm shift is moving toward a less passive approach and to a more active approach. This means that companies are popping up that actually push and place your content for you on various websites, channels, and blogs. This move is much more aggressive than what we have done in the past and while it will reach more people, it also has its inherent problems.

For example, there are many companies that will offer to syndicate a real estate agent or company’s listings. This could be a good thing because it broadcasts properties for sale all over the internet and makes it easier for people to find yours. The problem is that there is a major disconnect between brokerage firms, syndication companies, and the web sites that display these listings. Rarely are the listings being displayed correctly, accurately, or in the places promised by the syndication companies. Sellers get upset that their homes are being displayed incorrectly, agents get blamed for putting out inaccurate information, and the syndicators blame everyone from the local MLS to the web sites receiving the listings.

So what’s the answer to syndicating real estate listings? Be careful, this process is far from perfect and still has a long way to go to work out all of the bugs. If your home is for sale and your agent is placing the listing across multiple platforms, you may want to check out a few of the more popular sites to make sure your home is being displayed correctly or displayed at all.

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.CoDreamHouse.com